Does Accepting B2B Credit Card Processing Outvalue The Cost?

Everyone knows that it costs businesses money to have B2B credit card processing in place, and, actually, this is the top excuse given by B2B organizations for refusing to accept credit cards. In fact, almost 70 percent of suppliers replied to a First Annapolis Consulting survey saying the high cost of accepting cards was the primary reason for resisting them. Yet, while having to pay a fee may seem to be a valid reason for eschewing this form of payment, in fact, accepting cards brings a host of benefits that can lead the value to outweigh the costs significantly.

In today’s constantly changing marketplace, digital convenience is king. Therefore, whether to accept credit cards weighs heavily on suppliers’ minds, especially since there has been an ongoing trend toward refusing to accept paper checks. Customer preferences have clearly changed over the last few years, and consumers now demand online experiences both to take advantage of the convenience of being able to pay in an instant using their desktop or mobile devices and to benefit from the additional security that online payment systems provide.

Does B2B Credit Card Processing Make Sense For My Business?

While not every type of buying behavior or B2B relationship is right for credit card acceptance, when the conditions are ripe, companies can reap exceptional value from the transactions. So, how can you determine whether accepting B2B card payments is right for your business? Here are five markers to help you to decide.

Cash Flow

Companies that offer the facility to accept credit cards to their customers enable suppliers to reduce their DSO (day sales outstanding) figures. If credit cards aren’t accepted, there are always some customers who wait before paying their invoices, so they can optimize their DPO (days payable outstanding). However, once cards are brought into the payment mix, customers can pay using their credit card, gaining the advantage of an improved DPO through deferring payment for 45 to 60 days using their credit card program, which, in turn, improves the DSO of the supplier.

Improvement In Processes

At present, almost 90 percent of suppliers are using manual methods of receiving their remittance data. This is not only tedious but also highly time-consuming. When credit cards are adopted, the costs of this process can be completely eliminated, with remittance data being flowed automatically back into the system to increase labor productivity.

Reducing Costs

The process of collecting outstanding invoices can be extremely high for ARM departments. Chasing after customers for payments is time-consuming and stressful and reduces cash flow exponentially. However, when credit cards are accepted, and an automated system put in place, all these problems are eliminated. Customers are able to log into an online portal to see their invoices then pay using their card over the Internet. With automatic receipt of payment in real time, there is no longer any need to mail checks.

Mitigating Risk

If you have never thought of a credit card as a tool for risk mitigation, you need to think again. By accepting cards, you can actually reduce your risk of exposure to fraud and bad debts.

Customer Satisfaction

Today’s customers have changed their preferences and now want something more convenient than the traditional check-in-the-mail option. When you offer acceptance of credit cards, your customers’ needs are better met, thus increasing the likelihood of them utilizing your services again.

Overall, when everything is considered, many companies begin to realize that accepting credit cards makes good financial sense on a number of fronts. BillingTree can offer impressive B2B credit card processing solutions to suit the needs of your business.